Today, Takahashi confirmed that Microsoft's upcoming 65nm
die shrink for the Xbox 360's microprocessor and GPU is codenamed
"Falcon." Takahashi reports that Microsoft is currently
qualifying the new Falcon chips along with a redesigned motherboard. The
65nm-equipped Xbox 360s are due to hit store shelves this fall.

The new chips are not only smaller and roughly 50 percent
cheaper to produce than their 90nm counterpart, but they are also cooler.
Cooler-running chips coupled with a revised cooling solution would go a long
way to eradicating the Xbox 360’s fatal flaw: the Red Ring of Death (RROD).

I don't think they care. They just think that you saved money on the purchase, and now it is time to pitch in another $80 for a HDD. People with the core system will eventually need to buy HDDs, and if they sold a $279 core system it will allow people to pay for additional features as they go. I think it should be $279 core, $349 Premium (or drop it) and $399 Elite. I think it will end up being $279 Core, $349 Premium and $429 Elite. I would actually pay $429 for the elite even though I wanted it to drop to $399. Whats $30 at the end of the day? Frickin' controllers are $50 and Live is $60.